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Recommended Architecture

Am currently planning a PetaSAN setup. TBH I do feel that it is a waste to have the Management Nodes (first 3 nodes) on physical machines. Would there happen to be any drawbacks to having management nodes on virtual machines and Local Storage nodes on physical machines? Do you recommend this setup?

Secondly, how many Local Storage nodes is recommended at minimum?

Thanks.

You can have the management nodes also act as storage and iscsi services, so there is no waste.  So it is your choice if  you want to bundle the services or having them on separate boxes.  I think smaller installations would favor bundling services.

If your management nodes are without storage or iscsi, yes you can run them as vms, just make sure not to put all 3 in single hypervisor, so if one fails you have 2 other running.

It is best to have at least 3 storage nodes, this includes management nodes running the storage services.